[bcostlow]

Sorry Jake, but I don't feel sorry for you.

Well, maybe a little, if your claims about being tarred unfairly with the CDS debacle are true.

But stop whining. All over the USA, people who work hard, who get great reviews from bosses, customers and peers, who were promised bonuses and profit sharing, are seeing instead slashed pay and benefits. That is, if they are lucky, and not getting RIFed.

Your company is in the crapper, and being propped up by taxpayers both explicitly by government bailout, and implicitly by the Fed.

If you worked anywhere besides the financial industry at a company in AIG's shape, you wouldn't be getting a bonus, not because of politics, but because there wouldn't be any money to pay one.

Spare me the false charity as well. People in your line of work compensated themselves as if they were founders and early investors in F500 companies, while holding positions that would barely command six figure salaries in other industries. I'm sure most readers here on HN would like to be in the position to write a 750k check to charity in the face of a depression.

That $100 million a year in equity and commodity trading? How much of that was on the back of the tech and housing bubble, and exploding oil prices? Sans the games the guys down the hall were playing with CDS and CDOs, would your returns even have been so high?

[comatose_kid]

I strongly disagree. He didn't make those risky bets. He honored his end of his agreement, and so should be compensated accordingly.

Perhaps you'd feel differently if your boss asked you to work for the next year, promised you a big lump sum, but then at the end of the year said 'sorry, but the money we borrowed from the gov't means it's not politically expedient for us to honor our agreement'.

Emotions aside, it sounds like he's getting a raw deal (and it doesn't matter if he's already worth millions - his net worth should have no bearing on whether or not the contract should have been honored).

[smallpaul]

> But stop whining. All over the USA, people who work hard, who get great reviews from bosses, customers and peers, who were promised bonuses and profit sharing, are seeing instead slashed pay and benefits. That is, if they are lucky, and not getting RIFed.

Most of them are not the subject of congressional investigations. > If you worked anywhere besides the financial industry at a company in AIG's shape, you wouldn't be getting a bonus, not because of politics, but because there wouldn't be any money to pay one.

No, but he'd get a salary. Which he did not at AIG (according to his account).

> People in your line of work compensated themselves as if they were founders and early investors in F500 companies, while holding positions that would barely command six figure salaries in other industries.

Yes, that's more or less what he said in the article.

> I'm sure most readers here on HN would like to be in the position to write a 750k check to charity in the face of a depression.

Yes, that's more or less what he said in the article.

> That $100 million a year in equity and commodity trading? How much of that was on the back of the tech and housing bubble, and exploding oil prices? Sans the games the guys down the hall were playing with CDS and CDOs, would your returns even have been so high?

Perhaps your job also depends on the bubble economy. We'll know by this time next year.

[bilbo0s]

EXACTLY!!!

Commodities and equities were leveraged as well at AIG. Leveraging that the CDS business provided capital to finance. It's all connected. I think this guy is choosing facts to put himself and his team in the best light. There are probably a lot of people over there dressing down the CDS guys for being incredibly irresponsible, and the CDS guys were, I'm not trying to deny that. That said, the other business lines were more than willing to leverage off of that irresponsibility when the bets were going the right way.

I think it is time for ALL of us to admit our complicity in the current disaster. Wall Street was incredibly irresponsible. Regulators didn't regulate. And WE the American people, bought a lot of stuff we could not afford, and didn't save nearly as much as we should. Consider this, do you work for a company that exists solely due to the presence of investment capital? If so, do you feel a burning need to leave your position and go to work for a company that actually sells real things, to real people or companies, for real money?

I am not denigrating anyone here. My only point is that the sooner everyone owns up to their part, the sooner we can do what we need to move on. We should stop trying to hang it all on Bush, or regulators, or bankers, or Republican Congressmen like Phil Gramm, or Democratic Congressmen like Chris Dodd. Or on the guy down the hall, as the guy in the article is trying to do. They all played a role, but it was a team effort.

We all contributed to this crisis. Now it is true that some contributed more than others. But for a guy who works at AIGFP to claim to be blameless, is fanciful if counter productive at best, and potentially divisive in the style of Marie Antoinette at worst. Probably somewhere in between like most of these things.

[endtime]

We all contributed to this crisis.

I take issue with this. I certainly didn't contribute to the crisis - I'm a student and have been since kindergarten. The vast majority of Americans didn't contribute to the crisis. I'd say that even the majority of people on Wall St. didn't contribute to the crisis. Those who are responsible should own up, but playing the "everyone say sorry" game is pointless if not disingenuous.

[jimbokun]

"The vast majority of Americans didn't contribute to the crisis."

What percentage of Americans bought greatly over valued homes and have excessive credit card debt? The net savings rate has been 0 in the recent past.

I will take at face value that you, personally, have not contributed to this crisis. But a large number of Americans have.

[zurla]

The company should have gone bankrupt (and certainly would have, without US government intervention), in which case none of these people would have seen any bonuses at all. he should be grateful for the $1 :-)

[comatose_kid]

So it's his fault the government intervened, then? Imagine for a moment that logic crept into this train-wreck of a thread:

All I see is some guy who took no salary for a year on the promise that he'd get a bonus at the end

The situation became politicized, so his bonus was rescinded. For all those people accusing him of whining, I hope you never complain about politics at your workplace.

[Rod]

Do you realize what the consequences of letting AIG go bust could be? Do you realize that bailing out crippled financial institutions is entirely different from bailing out Motown's idiot car companies? Do you realize that AIG has various divisions and only one of them was trading the toxic financial products that destroyed the company?

Your comment sounds like demagogy.

[kiba]

Unprofitable firms and crippled fianancial insitituions are a libability to the economy. Proping them up with stolen taxpayer money is not a sound way to run an economy.

Profit and loss exists for a reason, they finetune the allocation of resource to ones we find most efficent. If we don't allow the bust to run the course, than we will be less prosperous in the long run.

Beside, this is not the end of the world. We suffered worser recession like the recession of 1921.(Yes, worser than the Great Depression) Then the 1920s became the roaring 20s.

[Rod]

I am also a fan of "Darwinian Capitalism", but AIG and other huge financial institutions aren't called "too big to fail" without a reason. I advocate pragmatism over blind ideology. As much as I would like to see AIG implode, I think one should be careful and take into account what that would imply, and how the shockwave of destruction would affect the rest of the economy. All in all, all I am saying is: analyze the problem, make decisions based on data, not based on gut feelings or dogma.

Last but not least: the financial world in the 1920s was completely different than what it is today. Unfortunately, in Economics experiments are not exactly reproducible. For one reason they call it the dismal science, right?

[zurla]

I do think there is a legitimate debate as to whether or not we should have bailed out AIG. To address your later points, there are plenty of respectable people who argue we should have let AIG go bankrupt. "Financial experts", if it makes you feel better, for example Jim Rogers, whom I mention since you seem hung up on this point.

[Rod]

Knowing that Jim Rogers argues that we should have let AIG gone bankrupt does not affect me. What I am interested in is knowing WHY Jim Rogers believes that AIG should have gone bankrupt. I would like to know on what ground he argues that. Do you have any URLs on that? I am intrigued.

[ams6110]

Going into bankruptcy does not mean going out of business, at least not immediately. It basically just lets you put your debts "on hold" while you either reorganize or wind down under court supervision. Gives everyone time to take a breath and think rationally. Sounds pretty good in comparison to what happened?

[Rod]

I have read articles written by so-called "experts" explaining clearly and forcefully why we should let AIG go bankrupt. Then I have read articles written by other "experts" who claim the opposite, also in a convincing manner. When experts look at the same problem and draw entirely different conclusions, then:

i) their own interests are clouding their judgement.

ii) they don't all have the same data.

iii) their "expertise" is greatly overrated.

In the last few months there has been so much irrationality and lack of transparency, that I now truly find it hard to believe anything I read on this topic.

[plinkplonk]

"Do you realize that AIG has various divisions and only one of them was trading the toxic financial products that destroyed the company?"

Most companies that go bankrupt do have some divisions that performed well and didn't "destroy the company". Weak argument.

[Rod]

The argument was NOT the one you cherry-picked. The argument was that bailing out financial institutions is NOT the same as bailing out non-financial institutions. Since you did not get the idea, I assume that Finance is not your forte. My mistake for not having made my point more explicitly.

What we are witnessing is collective schadenfreude. Most people are happy to see these giant institutions fall. Unfortunately, most people know zero of Economics and Finance and fail to realize that if some institutions collapse, we might end up in an even worse situation.

[plinkplonk]

"The argument was NOT the one you cherry-picked. The argument was that bailing out financial institutions is NOT the same as bailing out non-financial institutions."

You asked a series of rhetorical questions of the form " Do you realize blah". That isn't "argument" or reasoning. Do you expect people to automatically agree to anything you say just because you say "do you realize.."?

"Since you did not get the idea, I assume that Finance is not your forte."

A better assumption is that you didn't make your point well ;-)

[Rod]

True, I concede that I didn't make my point well. Also true is that my goal was to counter the OP's argument, not present a forceful one.

I don't know what you do in your professional life and I would be lying if I said I care. Before coming to grad school I worked at a hedge fund and I realized I know practically zero of Finance. I strongly believe that discussing the details is what matters, and no one on HN is qualified to discuss the details on the AIG debacle. Let's face it. These financial discussions here on HN are usually enormous displays of ignorance (there are rare exceptions). This community's forte is coding. No one around here knows what's on AIG's books. I bet no one around here is a great bankruptcy lawyer. Even those who know Finance only know a few instruments, and AIG was trading a lot of instruments. It would take decades for one to learn all it takes to REALLY understand what's going on in Wall Street.

Knowledge is not a matter of consensus. Some comments are written by clueless people. Many of these comments are upvoted by even more clueless people. I make no claims that I know what is going on, but I see a lot of pompous fools on HN who believe they know it all. I say, let us go back to coding because we all suck at Finance. I only happen to suck less than most because I worked in the field.

[petercooper]

Is there any way to find out what the original URL was on "dead" items? There really should be a way, even if it's some crazy tiny nofollow link someplace ;-) (I can Google in this case, but that's not always true.)

[dcurtis]

Change the word "item" to "edit" in the URL.